CAWA speaker says it’s a ‘wonderful time to be in this industry’
Las Vegas—The aftermarket needs to know how it’s setting itself up as an industry for success, and how the OEs are thinking about competing against it, says Charles Tyson, executive vice president of Advance Auto Parts.
“There’s a lot of change happening in our industry that we must be ready for, such as technology and the impact it’s going to have on our workforce, teams and customers, and the investments we need to make in the supply chain, people and training,” said Tyson, who gave a keynote address regarding the future of the auto care industry at the recent CAWA annual dinner meeting, held in conjunction with Industry Week in Las Vegas. The event, sponsored by Motorcar Parts of America, raised $18,964 for CAWA’s Memorial Scholarship Fund and was attended by 125 people.
“Change will drive us to do more things differently over the next few years than we’ve had to in the past 15,” he said. “It’s an incredible time to be in the aftermarket and some of the trajectories in our businesses over the next three to five years will be exciting.”
Tyson said the industry must be ready to respond to a smarter consumer, who’s better informed via the Internet and will make their buying decisions more quickly than ever before; be ready to manage technology complexities and how they will impact business at an ever-accelerating rate; be ready to have a part when the customer needs it; and be ready to invest in people, “because if the industry doesn’t, there will be a shortage. Will there be enough technicians to do the quality work to put product on a car when a consumer wants it?”
He noted positive trends, including miles-driven in July that were the highest since before the economic downturn, and as people take advantage of low gas prices, they’ll create annuity for the industry in 2016.
“Gallon usage is up 4.1 percent, but U.S. consumers spent $87 billion less on gas in 2015 than 2014, which is money that can go toward maintaining their vehicles,” Tyson said. “During the recession, many families often used only one of their two vehicles. Now they’re putting them back on the road as both parents are again employed — 80 percent of miles-driven comes from employment — and they’re going back on vacations.”
He also said used car sales for vehicles more than 10 years old are now 35 percent of the total sales, whereas four years ago it was only 15 percent, which is a “great driver for our value proposition from an aftermarket perspective — it’s a wonderful time to be in this industry.”
Five trends impacting the aftermarket
Consumers are getting more access to data and the ability to make choices and make choices more quickly, Tyson said. “Consumers can now access service solutions through their smartphones, so installers have to ask if they’re making themselves relevant and available in that space. We’re finding that more customers demand that level of service in terms of how they think about their choices.”
Mobile devices are also being used more to qualify shops based on referrals and ratings. “A potential customer can make a decision in two minutes as to whether they will turn left or right for service work,” he said.
The technology in new vehicles will create challenges for everyone, from team members in stores being able to explain the technology to customers, to repair shops that must employ trained technicians to perform repairs, and to distributors who must make sure the product is available.
“There’s a race to move product faster through the supply chain and closer to the customer,” Tyson said. “There’s clearly a war in our industry in terms of SKU count and of dollars per store close to the customer. Those who can affect fast-moving parts will win in this industry.”
He added that stores have to equip employees with the knowledge to adequately explain parts information and installation instructions so they don’t end up with comebacks. “We have to help repairers perform the installation right the first time. From a supplier point of view, I don’t think we spend enough time doing and making them more efficient with repairs.”
The aftermarket, Tyson said, must provide a great experience, starting with the customer. “We have to consider the end-user experience and compare ourselves to new dealers in terms of their level of professionalism, who are increasingly doing more aftermarket repairs.”